the industrial sectors integrated solutions (isis

The Industrial Sectors Integrated Solutions (ISIS) -

Cement Model

Ravi K. SrivastavaAir Pollution Prevention and Controls Division

National Risk Management Research LaboratoryOffice of Research & Development

Elineth TorresOffice of Air Quality Planning and Standards

November 2010

2

Outline

• The Industrial Sectors Integrated Solutions (ISIS) model– Capabilities and framework– The U.S. cement industry– An example evaluation

• Multi-pollutant reduction via energy efficiency improvements

• Ongoing and planned work

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What does the ISIS model do?• The Industrial Sector Integrated Solutions Model is designed to

provide information on:

– the optimal industry operation (least cost) to meet the demand for the products and any emission reduction requirements,

– the suite of cost-effective controls and energy efficiency measures needed to meet the emission standards,

– The cost of mitigation, and – the economic response of industry to the policy.

• ISIS is a dynamic model and can assess policy implementation out to any number of years

• ISIS-cement has undergone peer review and recently has been used to help analyze policy options for NESHAP and NSPS rulemaking

Policies that can be Evaluated with ISIS

• Criteria pollutants (NOx , SO2 , PM, CO)– emission limits and/or cap-and-trade

• Hazardous Air Pollutants (e.g., Hg, HCl)– emission limits

• CO2– cap-and-trade, emission taxes

• Long and short time horizons– CO2 (decades), Criteria/HAPs (annual)

• Regional or national requirements44

ISIS: Broad Framework

• Objective – maximize total surplus over the time horizon of interest, subject to:– meeting the demand for the sector-specific commodities; and– satisfying any sector-specific emissions related requirements.

• ISIS coded in the GAMS (General Algebraic Modeling System) language can dynamically evaluate– Multi-product industries operating with regional markets– Multi-pollutant policies– Short and long time horizons

• ISIS is a large dynamic linear programming model

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6

Objective Function

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Price

Supply curve

Quantity

Demand curve

Equilibrium

Consumersurplus

Producersurplus

C1

P1

Q QE

P

C

Maximize Total Surplus

Total Surplus = Consumer Surplus + Producer Surplus

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The U.S. Cement Industry• 39 companies operate 107

Portland cement facilities in 20 regional markets

• Plant size (1000 tons clinker) – Largest plant = 3,108– Medium plant = 810– Smallest plant = 260

• 2005 data– Domestic production: 99.3 MMT

(94.4 MMT Portland cement, 4.9 MMT masonry cement)

– Imports: 30.4 MMT1

– average plant utilization rate was 93%

• Projected investments over $5 billion for 25 million metric ton capacity; now underway (2007- 2012)

• Portland cement consumption is expected to reach 183 MMT2 by 2030; 41% growth over the 2005 level

1 USGS, 2005 Minerals Yearbook, February 2007, p.16.9, http://minerals.usgs.gov/minerals/pubs/commodity/cement/cemenmyb05.pdf2 Portland Cement Association. Forecast Report . January 31, 2008.

http://minerals.usgs.gov/minerals/pubs/commodity/cement/cemenmyb05.pdf

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Cement Industry Data in the Model• Demand and Supply

– Demand projections for 20 regional markets and capacities for 208 U.S. cement kilns (PCA 2006)

– Imports by custom district (USGS, 2006)– Inter-market transportation costs (PCA 2009)

• Emissions– NOx and SO2 (NEI 2002 v3) data used to develop

emission intensities – CO2 emission factors

• Controls, process modifications and energyefficiency measures– Applicability, performance, and costs1

1 Andover Technologies Partners. August 22, 2008

NOX Control Technologies for Cement Kilns

Control Type

Impact on Emissions, ±% change

Electricity Consumption, kWh/ton of cement

Water Consumption,

gal/ton of cement NOX SO2 PM Hg Other Grinding Kiln Operation

Low NOX Burners – Indirect Firing -20% to -30% No impact 0 -1.2 0

Mid Kiln Firing-Tires -20% to -40% May vary 0 0 0

Low NOX Burner + Mid Kiln Firing- Tires -20% to -40% May vary 0 -1.2 0

Low NOX Burners + Tire Derived Fuel -20% to -40% May vary 0 -1.2 0

Low NOX Burner + Selective Non Catalytic

Reduction -50% No data No data No data No

data 0 -1.2 +1.25

Low NOX Burner + Selective Catalytic

Reduction -90% Oxidation No data Oxidation No

data 0 -1.2 +1.25

Low NOX Burners + CemStar -30%

-1.3 (wet process); -1.9 (dry process)

-1.2 from LNB and

-1.5 (wet process) or

-2.2 (dry process) from CemStar

0

CemStar/Fly Ash Injection -20%

-1.3 (wet process); -1.9 (dry process)

-1.5 (wet process) or

-2.2 (dry process) from CemStar

0

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SO2 Control Technologies for Cement Kilns

Control Type

Impact on Emissions, +/- % change

Electricity Consumption, MWh/ton of

clinker

Process Water Consumption,

ton/ton of clinker

Cooling Water Consumption,

ton/ton of clinker NOX SO2 PM Hg CO2 Other

Solvent CCS New -99% -99% -85% -0.022 0.429 4.82

Solvent CCS Retrofit -99% -99% -85% -0.103 0.160 4.82

Oxy-combustion -99% -99% -85% 0.174 14.3

CO2 Control Technologies for Cement Kilns(Under Development)

Control Type

Impact on Emissions, ±% change

Electricity Consumption, kWh/ton of cement

Water Consumption,

gal/ton of cement NOX SO2 PM Hg Other Grinding Kiln Operation

Wet Scrubber

-90% to -95%

-80% -50% for THC -99.9% for HCl

+0.2 (wet process

kilns) +5

+12 (wet process); +1.5 (dry process)

Dry Lime Injection -50% -75% for HCl

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Multimedia Impacts of Process Capacity Replacement on Cement Kiln Operation

Kiln Type

Water Consumption,

gal/ton of cement

Electricity Consumption,

kWh/ton of cement Waste

Grinding Kiln Operation

Generation Rate, ton/ton

of cement

Disposal Cost, $/ton of cement

Wet to Precalciner -214 -12 -7 -0.072 *

Long Dry to

Precalciner No chang Not

available Not

available -0.062 *

Preheater to

Precalciner No change Not

available Not

available 0 *

* Cement Kiln Dust disposal costs vary widely by location.

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Energy Efficiency Measures for Clinker Making

Energy Efficiency Improvement Method

Electricity Consumption Change, kWh/ton clinker

Heat Input Change, MMBtu/ton of clinker

Dry Wet Pre- heater

Pre- calciner Dry Wet Pre-

heater Pre-

calciner EMCS

(Energy Management and Control System)

-1.90 -1.50 -1.90 -1.90 -0.15 -0.21 -0.15 -0.15

SR (Seal Replacement) -0.02 -0.02 -0.02 -0.02

CSI (Combustion System

Improvement) -0.25 -0.35 -0.25 -0.25

IF (Indirect Firing) -0.16 -0.16 -0.16 -0.16

SHLR (Shell Heat Loss Reduction) -0.20 -0.20 -0.20 -0.20

OGR (Optimize Grate Cooler) 0.90 0.90 0.90 -0.09 -0.10 -0.09 -0.09

CGC (Convert to reciprocating

grate cooler) 2.40 2.40 2.40 2.40 -0.23 -0.24 -0.23 -0.23

HRPG (Heat Recovery for Power

Generation) -18.0

EMD (Efficient Mill Drives) -2.00 -1.70 -2.00 -2.00

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Plant-wide Energy Efficiency Measures

Energy Efficiency Improvement Method Electricity Consumption Change,

kWh/ton clinker

Dry Wet Preheater Precalciner

PM* (Preventive Maintenance) -2.50 -2.50 -2.50 -2.50

HEM (High Efficiency Motors) -2.50 -2.50 -2.50 -2.50

ASD (Adjustable Speed Drives) -6.25 -6.00 -6.25 -6.25

OCAS (Optimization of Compressed Air Systems) -1.00 -2.50 -1.00 -1.00

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Example Case

Two broad questions:

•What range of CO2 reductions may be practicable in the near-term (2013-2020), and

•For that range, what may be the market characteristics for the U.S. cement industry.

These questions are relevant because in the absence of carbon capture and sequestration (CCS) technology, the path forward for reducing CO2 emissions in the near-term (decade ending 2020) will need to depend on the currently available energy efficiency measures and raw material and product substitution approaches.

Example results for illustration only. The draft slide does not reflect EPA policy.

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CO2 Caps Modeled

Example results for illustration only. The draft slide does not reflect EPA policy.

CO2 Cap(short tons)

Reduction from Projected 2013 Emission Level (%)*

64,099,115 5

60,725,478 10

57,351,840 15

53,978,202 20

50,604,565 20

* 2013 emissions were those under the business-as-usual (BAU) case.

A recent EPA analysis of the American Clean Energy and Security Act (Waxman-Markey Bill) reflects a price range of 13-24 $ per metric ton in 2015. Considering this indication, a reduction range of 5-15% appears practicable.

Example results for illustration only. The draft slide does not reflect EPA policy.16

Projected Allowance Prices in 2013

0

5

10

15

20

25

30

35

40

0.0 5.0 10.0 15.0 20.0 25.0

CO

2 A

llow

ance

Pric

e ($

/sho

rt to

n)

CO2 Reduction (%)

Two metrics for additional evaluation of potential emission reductions levels could be: (1) U.S. industry revenue under policy, and (2) cement price under policy. Arguably, these metrics speak to the interests of both the industry and consumers.

An increase in cement price under a CO2 reduction policy will cause a drop in demand. Also, if the policy does not impose any requirements on imports, these can increase under policy because production can shift to other countries. Both factors, drop in demand and increased levels of imports, can cause a reduction in revenue for the cement industry in the U.S.


Projected Revenues over 2013-2020 Projected Average Prices in 2013

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

43

44

45

46

47

48

0.0 5.0 10.0 15.0 20.0 25.0

Cha

nge

in U

.S. I

ndus

try R

even

ue (

%)

U.S

. Ind

ustry

Rev

enue

(bi

llion

$)

CO2 Reduction (%)

U.S. Industry Revenue (billion $) Change in U.S. Industry Revenue (%)

0

5

10

15

20

25

0

40

80

120

0.0 5.0 10.0 15.0 20.0 25.0

Cha

nge

in C

emen

t P

rice

(%)

Cem

ent P

rice

($/s

hort

ton)

CO2 Reduction (%)

Cement Price Change in Cement Price (%)

Figure shows the drop in demand due to rising prices under increasing CO2 reduction levels. This drop results in the loss of revenue seen in the earlier figure. Notably, the drop in demand relative to BAU is less than about 16 percent if the reduction levels are kept at or below 15 percent.


Projected Demand over 2013-2020

-25

-20

-15

-10

-5

0

0100200300400500600700800900

1,0001,1001,200

0.0 5.0 10.0 15.0 20.0 25.0

Cha

nge

in D

eman

d (%

)

Dem

and

(mill

ion

shor

t ton

s)

CO2 Reduction (%)

Demand (million short tons) Change in Demand (%)

Under example policy options imports increase relative to the BAU case. Also, as the cap is tightened from the 15% reduction level to the 25% reduction level, the industry resorts to increasing imports in a monotonic fashion. Imports come with zero emissions in the U.S. and result in reduced domestic fuel and raw materials processing. Note that the impact of increases in imports in the U.S. on emissions in exporting countries is beyond the scope of this analysis. It is recognized however that such increases in imports will generally result in increases in CO2 and other emissions in exporting countries.


Projected Imports over 2013-2020

0

1

2

3

4

5

250

260

270

280

290

300

0.0 5.0 10.0 15.0 20.0 25.0

Cha

nge

in im

ports

(%)

Impo

rts (m

illio

n sh

ort t

ons)

CO2 Reduction (%)

Imports (million short tons) Change in Imports (%)

Significant collateral reductions in other pollutant emissions may be possible. For example, at the 15% CO2 reduction level, each of NOx and SO2 emissions may be reduced by more than 250 thousand short tons. These reductions result from use of energy efficiency measures and reduced production.


Projected Emissions over 2013-2020

0

100

200

300

400

500

600

700

0

200

400

600

800

1000

0.0 5.0 10.0 15.0 20.0 25.0

CO

2E

mis

sion

s (m

illio

n sh

ort t

ons)

NO

x, S

O2

Em

issi

ons

(thou

sand

sho

rt to

ns)

CO2 Reduction (%)

NOx SO2 CO2

The industry installs and operates measures with multi-pollutant, NOx , SO2 , and CO2 , reduction benefits. The majority of these measures are installed in 2013 to help comply with the reduction requirement.


Applications of Energy Efficiency Measures and Controls(at the15% Reduction Level)

0

5

10

15

20

25

30

35

40

45

2013 2014 2015 2016 2017 2018 2019 2020

Per

cent

of O

pera

ting

Cap

acity

(%)

MKF-tires CEMstar PM EMCS SR CSI IF SHLR OGR

The industry engages in relatively modest levels of CO2 allowance banking and related trading activity, practices consistent with the relatively modest level of reduction required.


Projected CO2 Emissions and Reductions from the U.S. Cement Industry Under the BAU and the 15-percent CO2 Reduction Cases

0

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016 2017 2018 2019 2020

CO

2(m

illio

n to

ns)

BAU Case Emissions, CO2 (tons) Emission Cap, CO2 (tons)

Controlled Emissions, CO2 (tons) Banked Allowances, CO2 (tons)

Summary

• Based on CO2 allowance prices, a range of CO2 reductions, 5-15%, from the projected 2013 emissions appears to be practicable.

• For this range, the drop in U.S. industry revenue ranges from about 4 to 6.5% of the revenue in the BAU case.

• Significant collateral reductions in other pollutant emissions may be possible under the range of 5-15% CO2 reductions.

• Results are indicative because – Use of all raw material and product substitution approaches needs to be included

in ISIS-cement, – Availability of materials (e.g., blast furnace slag, tires) and the degree to which a

specific abatement measure could be applied across the industry need further assessment, and

– Extra-U.S. CO2 emissions associated with imports need to be taken in to account while setting reduction targets.

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Ongoing Work and Future Directions

• Cement industry model– Peer reviewed; recently has been used to

develop help analyze policy options for NESHAP and NSPS rulemakings

• Work in progress on adding the U.S. Pulp and Paper & Iron and Steel sectors

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ISIS Development Team•

ORD –

Ravi Srivastava, Will Yelverton

•

OAQPSOverall coordination: Elineth TorresISIS‐Cement: Elineth Torres, Keith Barnett ISIS‐Iron & Steel: Matt Witosky, Donnalee JonesISIS‐Pulp & Paper: Elizabeth PalmaCost development: Tom Walton, Larry Sorrels, and Charlie Fulcher

•

Contractors–

Sam Analytics, Andover Technology Partners, RTI, Arcadis

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Acknowledgements•

Dr. Dallas Burtraw

et al., RFF•

Dr. Richard Newell, Duke University•

Dr. Elliott Lieberman, EPA/OAP/CAMD•

Dr. Hendrik

G. van Oss, USGS

Thank you

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the industrial sectors integrated solutions (isis

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